Flying Kites is a non-profit that seeks to raise the standards of care for orphans in Kenya. Here, board members snap a photo with the residents of the Children’s Home. Photo: Leila de Bruyne

By Leila de Bruyne

This spring, I turned 30. And it’s true what they say: the younger you are, the more you think you know. I spent my 20s building Flying Kites, a small non-profit serving orphaned children and vulnerable families in Kenya. It took lots of energy and lots of traveling, and was a ton of fun. Cue a cliche ‘start-up’ montage where my two co-founders and I, not to mention countless other characters, worked seven days a week and took huge risks that sometimes paid off and other times sent us laughing/crying under our desks.

In total, we raised more than $2.5 million dollars to invest in some of the poorest of poor families in Kenya. And please don’t tell our donors this: but it’s all been largely by the seat of our pants. Straight out of college, none of us had a background in the non-profit, or even the for-profit, industry. After a while, it got hard to keep that “low salary, long hours” buzz alive. As people entered their late-twenties, the office got quieter.

It’s not something you really hear about, the slow burnout that happens in the charity space. Your friends are climbing corporate ladders, with rungs of structure and professional development and salaries and bonuses. Meanwhile, you are running hard, just trying to stay on the treadmill, in hopes of doing good. The families and kids who are counting on you keep you up at night, but as time goes on, less and less makes you want to jump out of bed in the morning. Nothing can prepare you for the first time your eyes start to glaze over when someone says, “Wow that must be so rewarding. Tell me about it!” About what? The project, or the deep, deep feelings of loneliness and isolation that come from building a non-profit at 23?

Don’t get me wrong; we’ve had great support and generous mentors. In fact, I confided in one of them—Bostonian Paul English, a TED attendee (and the cofounder of Kayak.com) who is renowned for building teams and bringing out the best in businesses—that I lacked strategy and craved guidance on a daily basis. I complained to him about feeling generally overwhelmed. He quipped, “Do what I do: hire someone smarter than you.”

Dan Pallotta: The way we think about charity is dead wrong
Around the same time, I stumbled upon Dan Pallotta’s TED Talk, “The way we think about charity is dead wrong.” I had met Dan in his Cambridge office when Flying Kites was first starting out, and I had given out numerous copies of his book Uncharitable to friends and donors over the years. While I was always inspired by his message about investing in overhead, in order to do better work in the long-term, I felt unable to really deliver the argument in moments when it mattered. I would be in a presentation and someone would say, “What percentage of a dollar goes to directly to the children?” And I would freeze.

Dan’s TED talk was a game-changer for my co-founders and I. All of a sudden, we were able to present the logic behind our investment choices in a compelling, thoughtful way. In his way. In fact, we used his talk video so much that we ended up taking the sentences that meant the most to us and overlaying them with our mission in a two-minute video. (Yeah, not sure this is legal.)

Many people in the non-profit world have said that Dan Pallotta’s TED Talk changed how they thought about their organization. Photo: James Duncan Davidson

A few months ago, inspired by our conversation and by Dan’s talk, Paul English donated a substantial amount of money to Flying Kites to fund the salary of an executive director. In March, I hired my own boss, a formidable leader who has spent over 30 years in both the corporate and not-for-profit world. On her first day, I found myself confiding in her things I had been afraid to say out-loud: “We never have more than three months’ reserve in the bank. We need a plan and we don’t have one.”

Our first few months working together have been full of hope for me. I’ve had the pleasure of looking to our new CEO to formalize our operations and build structure around our vision. Razor’s Edge, Quickbooks, HR policies, board development—she’s swiftly charting the path that I couldn’t find because I had been so lost in the trenches.

It would seem my generation has all the answers. The news is full of stories of extraordinary CEOs in their 20s, taking over the world. Before, I would have felt embarrassed to admit that I wasn’t sure how to best run the organization I had started, especially in our culture of successful young trailblazers who wear sweatshirts to work. But after Dan’s talk and Paul’s generous gift, I realized that the organization had simply reached a point where its needs exceeded my skill set. Hiring my own boss was one of the greatest things I’ve done for Flying Kites.

Recently, I was telling Serah, one of the orphaned children who lives at our home in Kenya, about hiring our new executive director and how my role has changed.

“It’s because you needed more help?” she asked.

“Yes” I explained, “more help, but also a teacher of sorts, to guide us to make the best choices.”

She smiled and tilted her head, “Like having a grown-up around?”

Yes. Exactly like having a grown-up around.

I guess it takes a 30-year-old to know when to ask a grown-up for help. The ultimate dream is supposed to be working for yourself. That’s not my dream anymore. If my only legacy is that I am good at asking for help, I’m okay with that too. I love my job again and I finally jump out of bed in the morning again. I feel like I owe it to the children for whom we are responsible to put my CEO-ego aside and let someone wiser steer this heavy and evolving ship.

Leila de Bruyne blows out the candles on her birthday cupcake, held by Flying Kites chairwoman Meredith Starr. With her birthday came a big realization about her work. Photo: Instagram

]]>http://blog.ted.com/a-non-profit-gets-better-at-doing-good-with-inspiration-from-dan-pallottas-ted-talk/feed/4Flying-Kites-grouptedblogguestFlying-Kites-groupMany people in the non-profit world have said that Dan Pallotta's TED Talk changed how they thought about their organization. Photo: James Duncan DavidsonLeila de Bruyne blows at the candles on her birthday cupcake, held by Flying Kites chairwoman Meredith Starr. Photo: InstagramTED Weekends examines capitalism and charityhttp://blog.ted.com/ted-weekends-examines-capitalism-and-charity/
http://blog.ted.com/ted-weekends-examines-capitalism-and-charity/#commentsFri, 20 Sep 2013 20:00:20 +0000http://blog.ted.com/?p=82039[…]]]>

Dan Pallotta spoke at TED2013. Photo: James Duncan Davidson.

Capitalism and charity. A seemingly paradoxical combination. But could running charities like businesses foster the innovation and problem-solving needed to address the most pressing issues of our time?

In his talk at TED2013, The way we think about charity is dead wrong, Dan Pallotta argued that the way we think about charity is dead wrong. We should be encouraging charities to take financial risks, because the potential gains are enormous. In fact, he argued, this approach might be the way to finally end world hunger and discover a cure for our deadliest diseases.

This week’s TED Weekends on Huffington Post explores whether a for-profit model might be the best way to run charitable organizations. Below, excerpts from this weekend’s four essays to pique your interest.

Could it be that everything we’ve been taught about charity and about giving and about change is backwards? That when we show people only the means, without revealing the ends, we mislead them? Is it possible that in the name of an ethic we are actually prolonging the suffering of millions of adults and children the world over? Do we really think it is of some comfort to a mother who has just lost her little boy to bird flu that at least no one made a profit in the failed effort to save her son?

We allow the for-profit sector to feast on the tools of capitalism, while we deny those tools to the nonprofit sector, and all in the name of charity, no less. Real charity, as in grace, could not be undermined with more reverence paid to the notion of something noble. It is perhaps the greatest injustice ever perpetrated against all those citizens of humanity most desperately in need of our aid. But it is an injustice about which we have been largely unconscious. If we take responsibility for the thinking that has been handed down to us, revisit it and revise it, we could change our whole approach to changing the world. And then things could really begin to change. Read the full essay »

Charities’ missions and programs are constrained by a simple equation of how to reach x amount of people in y number of regions over the course of z months. Deviating from this formula can hinder organizations’ marketability, and so many decide to limit the scope of their projects to appease their funders.

At Ubuntu Education Fund, we have struggled to market our model, because it redefines the theory of “going to scale” by focusing on the depth rather than breadth of our impact. We have spent over a decade convincing donors, corporations, and foundations to believe in our mission — to help children living in the townships of South Africa grow into healthy adults with stable incomes. Much like the desire of any parent throughout the world, we try to give our students everything that they need from cradle to career. Read the full essay »

New innovative models are applying market-based solutions to make philanthropy smarter, more effective, and leaner in order to deliver higher impact results for all parties. From venture philanthropy applying venture capital finance and business principles to social causes and philanthropic goals, to social entrepreneurship and the emerging sector of social business beginning to blur the lines between for-profit and nonprofit, today’s philanthropic approaches are not just philanthropy as usual.

Let’s make tough choices — build infrastructure and take risks. I dare all of you — bring the maverick out in your philanthropy. Read the full essay »

We disdain charities that do not spend every dime delivering a bag of rice to that individual child in Zimbabwe or Mozambique or wherever we’ve designated our charity pennies be pinched. Control has become the Catch 22 of giving. And then we wonder why the problems of the world are never fixed, why does everything we do and give, never seem to change the world? We cheer at Google or Amazon when stock prices climb, while the overhead and waste there has to equal charitable giving across any state. What difference does it make what the overhead is, when Google makes money hand over fist? Charity guru Pallotta would apply this thinking to nonprofits. But still our thinking about entrepreneurs like Donald Trump, win or lose on real estate is, “Who cares how much he lost to win fame and riches?” This does not apply for really changing the world, now does it? Nobody even asks how many billions Trump has thrown away; it’s where he is now that matters. Read the full essay »

]]>http://blog.ted.com/ted-weekends-examines-capitalism-and-charity/feed/9Dan_PallottalizjacobsDan_PallottaThe why and how of effective altruism: Peter Singer’s talk visualizedhttp://blog.ted.com/why-how-effective-altruism-peter-singer-visualized/
http://blog.ted.com/why-how-effective-altruism-peter-singer-visualized/#commentsThu, 19 Sep 2013 16:00:55 +0000http://blog.ted.com/?p=81888[…]]]>If you’re lucky enough to live without want, it’s a natural impulse to want to try and help others.
Peter Singer: The why and how of effective altruism
But what’s the most effective way to give? This was the question philosopher Peter Singer asked in his 2013 TED Talk, given in Long Beach, California, and he shared some surprising thought experiments to help balance emotion and practicality. This talk was the latest to be given the graphic treatment by Superinteressante. Each month, the magazine’s editors select one TED Talk for a visual makeover. This imaginative vision was published as part of an issue of the magazine with “Change” as its central theme, inspired by the mass protests that took place in Brazil this summer.

Michael Pritchard is very likely the only person to have stood on the TED stage and uttered the immortal phrase, “Let’s get a bit of that poo in there.” At TEDGlobal 2009 in Oxford, he demonstrated his then-new product, the Lifesaver bottle, which can be used to turn filthy, rabbit-dropping-infested water into sparklingly clean liquid that’s safe to drink. Pritchard even got TED curator Chris Anderson to have a taste.

We spoke with Pritchard recently to find out what’s happened since his talk. There’s a lot to catch up on. For one thing, the Lifesaver bottle is now standard issue for the British military; every soldier in Afghanistan is armed with one. And Lifesaver has expanded, developing and introducing new sizes and products that go beyond the bottle. The Jerrycan, for instance, can process 20,000 liters of water — enough for a family of four for up to five years. The Cube is a disposable product designed for use in disaster zones; it’s currently in its second round of trials with Oxfam. The M1 system, meanwhile, is designed to provide drinking water to entire communities; it is currently being installed in remote regions throughout Malaysia. (See a video filmed on location at the bottom of the post.)

“Traditional methods of trying to solve water poverty dictate that you put infrastructure in, you put pipework in, you put pumping stations in,” he says. But the inaccessibility of so many regions of Malaysia make this prohibitively expensive, consigning residents to a life of trekking hours to collect clean water or forcing them to spend much-needed money on bottled water. “You couldn’t have that and a military budget or a social security budget.”

The M1 tackles the problem by bypassing it altogether. Instead, the system connects to a house’s guttering system to convert rain into drinking water.

“There’s no pipework, no pump stations, and instant access to sterile drinking water on a permanent basis,” Pritchard said proudly. (Filters do need to be replaced, every two or three years, he estimates.) The first phase will be complete by October this year, impacting the lives of a million residents.

It’s fascinating to hear how the business itself has evolved, too. What began as a project in Pritchard’s garage — a result of his feelings of rage and helplessness on seeing those affected by the tsunami that washed through Asia in 2004 — has evolved from crisis management to an all-out attempt to end water poverty globally. “By 2015, we will have ended water poverty in Malaysia,” he said on the phone.

It’s enough to give you goosebumps, and certainly enough to raise the profile of both Pritchard and his 35-person company, based in Colchester, England.

In June, Pritchard was named an MBE in the Queen’s Birthday Honors, a pretty big deal in the United Kingdom. But for all the plaudits and progress, it’s clear that Pritchard is still just getting going. He recalls a trip back to a village in Haiti some two years after the earthquake disrupted so much life there in 2010.

“About 30 families in this beautiful fishing village had each been given a Jerrycan,” he said. “I spoke to this wonderful guy about how he was getting on with the product, how it was fitting into his life. And he told me all about how the kids are healthy, how water was great. I realized he’d forgotten the problems he once had, and it struck me how quickly a transition can be made. Put the means in someone’s hands and suddenly the whole world changes. They’re not walking four hours a day to get water any more, they’re not spending money on water. It’s changed everything.”

The end of global water poverty? A heady dream, but one that Pritchard is determined to ensure comes true.

Back then, Lomborg was presenting the results of the first Copenhagen Consensus, for which he had convened a group of 30 of the world’s top economists to prioritize global problems according to how quickly and efficiently they might be solved. Their top recommendations: focus on curing HIV/AIDS, solving hunger, establishing free trade, and abolishing malaria.

Since then, he and his team have run the same survey twice more, in 2008 and in 2012. And most recently, Lomborg published a book of some of his thinking, the pithily titled How to Spend $75 Billion to Make the World a Better Place. But, as he told me in a recent telephone call, our general pattern of tackling big issues remains the same. “We still have a tendency to spend money on those groups with the best PR, or the groups with the cutest animals or the scariest pictures,” he said. “And that’s not necessarily the best way to spend our money.”

Nine years after that first survey, the results haven’t changed much, though now, solving malnutrition has risen to the top of the list. “If you spend $3 billion over the next four years, you could save 100 million kids from malnutrition,” says Lomborg. “Of course, hunger is a bad thing. But it turns out that solving this has much bigger implications than just curing the terrible indignity of kids suffering pangs of hunger. Feed them properly and they’ll develop better both physically and mentally, they’ll stay longer in school, so they’ll learn more.” Lomborg cites the results of a program run in Guatemala in the 1960s, in which children from villages who were fed well were monitored against those from a different village who weren’t. The difference decades later is stark. “Better marriages, fewer kids, better educated, better jobs, but most importantly from an economist’s point of view, the better fed children now make three times more money,” he says. “If we can make that happen for 100 million kids over four years, that could very likely lead to a virtuous circle.”

Lomborg is just as lively and hopeful today as he was back in 2005. And he says he’s neither frustrated nor disappointed by the lack of change in his survey’s findings. “We were a little afraid that things might just stay the same,” he acknowledges. “And there are some obvious repeats, but there are also a lot of new findings. For instance, AIDS went down. That was the top priority in 2004, but we managed to get hold of the AIDS epidemic and see a decline in new infections. That does not mean it’s over, but we’ve managed to cut off some scary scenarios.”

And, he says, people are beginning to understand his point of view more clearly. No longer do they think he is the antichrist for suggesting that global warming shouldn’t be a focus, at least with current methodologies for tackling it. “More people realize the current Kyoto-style approach hasn’t worked for 20 years,” he says. “At some point you have to say ‘let’s not do this again.'”

So why the $75 billion number for his new book? It’s an arbitrary figure, he confesses, but in the grand scheme of things, it’s also a reasonable target for spending on these big, seemingly intractable issues. And really, he wants all of us to think about where our charity dollars can make the most impact. “We want ordinary people who’ll spend $100 or $10 a year on doing good in the world to ask where they might do the most good,” he says. “Sure, Bill Gates could spend $75 billion himself, but we can all think about making the world a better place.”

]]>http://ideas.ted.com/since-the-ted-talk-bjorn-lomborg-is-still-thinking-about-evil-economics/feed/4lomborghelenwaltersSTT_lomberg20+ resources for better giving and living a more altruistic lifehttp://blog.ted.com/20-resources-for-better-giving-and-living-a-more-altruistic-life/
http://blog.ted.com/20-resources-for-better-giving-and-living-a-more-altruistic-life/#commentsMon, 20 May 2013 19:34:36 +0000http://blog.ted.com/?p=76000[…]]]>

Every day, most of us do something morally indefensible — we go about our lives without sending help to the 6.9 million children under the age of 5 who will die this year from poverty-related disease. In today’s talk, philosopher Peter Singer makes the case that ignoring these kids is as inhumane as ignoring a child who’s been hit by a car on the street in front of you.

Peter Singer: The why and how of effective altruism
“Does it really matter that they’re far away?” asks Singer. “I don’t think it does make a morally relevant difference — the fact that they’re not right in front of us, or the fact that they’re of a different nationality or race.”

But he’s not saying this to make us feel bad and helpless. Today’s talk actually delivers good news: that through what Singer calls “effective altruism,” we all have the ability to make a difference. Effective altruism begins with reason – the realization that all lives are of equal value — and looking for charities that affect the most lives, the most effectively.

To hear how a single person — and one who is nowhere close to a billionaire – can make a big impact for good in the world, watch this talk. And below, some resources to get you thinking about giving more effectively.

Against Malaria Foundation. Of those 6.9 million children who die every year of poverty-related illness, 1 million succumb to malaria. AMF provides insecticide-treated bed nets, which only cost $5 apiece.

Schistosomiasis Control Initiative. Protecting a child from worm-based disease for a full year costs around 50 cents. This organization works with governments to make sure it happens.

The Humane League. Invests time, money and energy to reduce animal cruelty and save the lives of animals, focusing on farmed animals.

GiveDirectly. This nonprofit transfers money to poor individuals in Kenya, letting them spend it for food and other basic needs, or on high-return investments.

Oxfam International. This mega aid organization works in a wide range of areas, including disaster relief, education, sanitation and women’s rights.

Proven Impact Fund. Dedicated to data and results, this fund from Innovations for Poverty Action supports interventions with strong evidence of success.

The Fistula Foundation. Fistula is a ghastly injury during childbirth, and it afflicts women living in the poorest areas of the world. This organization provides needed surgery.

The Hunger Project. Encouraging men and women to end their own hunger, this organization assists poor villages for five years, relying on the local workforce to build skills and take over before they leave.

Vegan Outreach. A nonprofit that seeks to expose and end cruelty to animals.

Population Services International. A global health organization that focuses on family planning, a simple service that can improve the health of women and their children.

Resources for finding other charities to support:

GiveWell. This nonprofit does in-depth research on charities and highlights a small number that do a remarkable amount of good per dollar they receive. (Singer recommends this site.)

Effective Animal Activism. One of the causes nearest to Singer’s heart is animal liberation, and he is impressed with this charity evaluator that focuses on animal suffering.

Charity Navigator. The largest charity evaluator in the U.S., Charity Navigator has data and ratings for nearly 6,000 charities.

Great Nonprofits. A site dedicated to informing would-be donors through reviews from board members, volunteers, experts and regular folks who’ve interfaced with a charity.

Resources Singer recommends for connecting with other people interested in doing good:

Giving What We Can. The members of this international society make a bold pledge: to donate 10% of their income to eliminating poverty in the developing world. A good place to connect with others, and to find high-quality organizations to support.

The Life You Can Save. At this site, you can pledge to donate any percentage of your income to those in need. In addition to directing you to great charities to support, it’s also a log for local volunteer opportunities.

Effective Altruism. A blog from Peter Singer and William MacAskill dedicated to the tenets of effective altruism.

The High Impact Network. This group has a great acronym – THINK. Members meet up to ponder effective giving — both strategically and creatively.

A resource for finding the career that does the greatest good:

80,000 Hours. Named after the number of hours most people will work over their lifetime, this career advice site has a twist – it gives advice on how different careers can have an impact on poverty. As Singer mentions in his talk, the site doesn’t shy away from unusual answers; it suggests that working in finance and donating a percentage of your income could fund multiple aid workers.

The Expanding Circle: Ethics, Evolution and Moral Progress. Peter Singer’s classic study of ethics, which examines the question: Where does our desire for altruism come from? He shows how it might come down to the biological drive to protect or kin — but that it is also a matter of reason.

]]>http://blog.ted.com/20-resources-for-better-giving-and-living-a-more-altruistic-life/feed/7Peter-Singer-at-TED2013katetedPeter-Singer-at-TED2013Giving It Away: TED Radio Hour examines generosity and philanthropyhttp://blog.ted.com/giving-it-away-ted-radio-hour-examines-generosity-and-philanthropy/
http://blog.ted.com/giving-it-away-ted-radio-hour-examines-generosity-and-philanthropy/#commentsFri, 17 May 2013 17:36:36 +0000http://blog.ted.com/?p=75931[…]]]>How can we give in better and smarter ways? This week’s new episode of TED Radio Hour explores the effects of giving – of your money, your time and your love. As our consciousness of philanthropy is shifting towards crowdsourcing and justice-centered discourse, people begin to self-organize around the causes they are passionate about. This episode describes how we, on a grassroots level, can give in new ways.

Volunteer firefighter Mark Bezos kicks off the hour with a story of a small, seemingly insignificant act of heroism. Through a tiny act of kindness, he realizes the dozens of possibilities we have in a day to be heroes in our own humble ways. Next, self-named “renegade ecolutionary” Ron Finley describes the garden that he began on the sidewalk in front of his house in South Central Los Angeles, meant for anyone to eat from. Finley expresses the importance of the yin and yang of giving and receiving — one cannot simply take, but must create a cycle of giving.

The second half of the show continues with Dan Pallotta, who wonders why we are so much more willing to invest in a private company’s enterprises than we are to donate to a non-profit. Pallotta stresses the paradigm shift that we need to enact — away from viewing non-profits as things that must produce results in the here-and-now to seeing them as organizations that can grow and thrive on long-term investments. Amanda Palmer closes the show, sharing her experience as a musician in a budding economy built on trust. As she talks, she emphasizes the importance of the simple act of asking when you need something — and the joy that comes from the connection found through mutual support.

]]>http://blog.ted.com/giving-it-away-ted-radio-hour-examines-generosity-and-philanthropy/feed/2giving_it_awayshirinsmooregiving_it_awayHow to pick the charity that’s right for youhttp://blog.ted.com/how-to-pick-the-charity-thats-right-for-you/
http://blog.ted.com/how-to-pick-the-charity-thats-right-for-you/#commentsMon, 11 Mar 2013 17:30:34 +0000http://blog.ted.com/?p=72798[…]]]>
In 1994, Dan Pallotta created the AIDS Rides — a series of long-distance fundraising cycling journeys that netted $108 million for HIV/AIDS research and services within the space of eight years. Later, his Breast Cancer 3-Day walks netted $194 million in an even shorter period of time. Both had their best years ever in 2002. But then, after a spate of bad press criticizing the management of the organization, both were shuttered.

This wasn’t just a problem for the newly unemployed or Pallotta’s wounded sense of pride. As he explains in this talk, the real issue is that everything we have been taught to think about charity is wrong. In particular, the single yardstick generally used to measure the worthiness of a charity – how much money goes directly toward the people it seeks to help and how much is used to cover overhead — is dangerously unhelpful. According to this thinking, the “best” charities are the ones with the lowest overhead. In fact, that focus may actually be preventing charities from making a real impact.

“The things we’ve been taught to think about giving and charity and the non-profit sector are actually undermining the causes we love … Our social problems are massive in scale, our organizations are tiny up against them — and we have a belief system that keeps them tiny,” says Pallotta, the author of the book Uncharitable. “We have two rulebooks—one for the non-profit sector and one for the rest of the economic world. It’s an apartheid.”

It’s time to change the way we think about giving to charity, says Pallotta. “Don’t ask about the size of their overhead,” he urges. “Ask about the size of their dreams.”

Curious to hear more on this new way of evaluating nonprofits, we asked Pallotta to share his thoughts on how to find a charity to support and what questions to ask along the way. Here’s what he had to say:

I want people to consider themselves a philanthropist no matter how much or how little they are giving. Even if you are giving $25, you are still a philanthropist. I advise people to figure out what cause they want to have an impact on, and take time doing research to find out the organization they feel is doing the best work on that problem. Then, make them your charitable partner for life. Continue to follow their progress, continue to learn about them, and continue to invest in them. You make a lot of inquiries before you buy a car or before you cast your vote for president – do the same thing before you cast your vote for a charity with your contribution.

Then, do in-person interviews with your top two or three. Call the charity and ask for a tour or overview meeting. That’s why charities have development departments — to nurture and build relationships with donors. If you are going to make a long-term commitment to an organization, even if the money isn’t huge, you owe it to yourself to do this kind of research in the same way you would go to a dealership to test-drive a car.

I also recommend looking at a charity’s annual report. Does it inspire you? Does it seem to have a sense of mission, bravery, boldness — or is it cautious and formulaic? Check out Invisible Children, Share our Strength, and Charity Water to see examples of organizations that are inspiring, right down to their materials. Though in general, don’t just rely on a website.

2) Ask: what progress is the charity making toward its goals—and what metrics does it use to measure that?

Ask the charity to provide you with program data that tracks their activities — and ask how they measure their own progress. This question may be the most important of all — it really gets at what data they collect, how serious they are about that data collection, and how they shift behavior or strategy based on what the data is telling them.

But note, it doesn’t necessarily matter if the organization is effective. Some problems can be extremely difficult to solve, and you don’t want to punish the charities working on those problems — otherwise we’ll only get charities working on easy problems. Think about if you had asked Jonas Salk how effective he was one year before he found the cure for polio. He would not have been very effective at that point, but that doesn’t mean you would not have wanted to invest in him.

Bringing cold, hard business sense to running charities can help transform the philanthropic landscape for all and for the better, says Pallotta. “Overall, for each charity I give to, I ask myself if I believe in their business model and if I feel they have a bold future ahead of them,” he says.

Dan Pallotta created two huge charity initiatives — AIDS Rides bicycle journeys and Breast Cancer 3-Day events. These initiatives raised $108 million for HIV/AIDS and $194 million for breast cancer. Both had their best years in 2002 … and then Pallotta’s nonprofit went out of business.

In the final session of TED2013, Pallotta shares why that happened: Major sponsors pulled out following a slew of bad press over the idea that his organization was investing 40% of their gross into recruitment and customer service. The backlash came from our basic — and wrong — cultural understanding of charity.

“What we know about charity and the nonprofit sector is undermining the causes we believe in and our desire to change the world,” says Pallotta. We expect businesses and nonprofits to use “two separate rulebooks,” he suggests.

“Business will move the mass of humanity forward, but will always leave behind that 10% of the most disadvantaged and unlucky,” he says — which is why we need philanthropy and nonprofits. But couldn’t the nonprofit sector use the same strategies as the business world to grow their profits and give more money to the needy? After all, says Pallotta, “How do you monetize the prevention of violence against women?”

The nonprofit sector as we know it isn’t working. In the United States, poverty has been stuck at 12% for the last 40 years. Homelessness has not been solved in any major city, and we have no cure for cancer.

“Our social problems are gigantic in scale, our organizations are tiny up against them — and we have beliefs that keep them tiny,” says Pallotta, the president of Advertising for Humanity and author of Charity Case.

Pallotta outlines five ways in which nonprofits are handicapped in their mission to help people.

1. Compensation

“We have a visceral reaction to the idea of people making a lot of money helping others. Interestingly, we don’t have a visceral reaction to the idea that people should make a lot of money not helping other people,” says Pallotta. “It gives a stark, mutually exclusive choice between doing well for yourself and your family and doing well for world.”

For example, the average salary for a CEO of a hunger charity is $80K. Meanwhile the average salary for someone with an MBA, after ten years of school, is $400K.

“We send people marching from the nonprofit sector into the for-profit sector, because they’re not willing to make that kind of compromise,” says Pallotta. “Not a lot of people with $400K talent will make a $316K sacrifice every year.” And actually, it turns out it’s more financially advantageous for these talented business minds to take the big paycheck, give $100K to a hunger charity each year, reap the tax benefits and get the label of “philanthropist.”

2. Adveritsing and marketing

“We tell for-profits to spend, spend, spend on advertising,” says Pallotta, but nonprofits are expected not to advertise — unless the advertising space and airtime is donated. People want to see their money spent directly on the needy.

But Pallotta points out that money invested in advertising can be returned dramatically amplified. He uses his own initiatives as an example. Over nine years, more than 182,000 people participated in Pallotta’s AIDS Rides and Breast Cancer 3-Day events, raising a cummulative $581 million.

“We got that many people to participate because we bought full-page ads,” says Pallotta. “Do you know how many people we would have gotten if we advertised with fliers in the laundromat?”

Pallotta stresses that nonprofits need to be able to communicate with the public the incredible work that they are doing — and to ask for bold commitments in return. “People are yearning to be asked to use the full measure of their potential for somthing they care about,” he says.

3. Taking risks on new revenue ideas

Nonprofits are not allowed to try new things, says Pallotta, because public outcry sounds so quickly at a failure. As Pallotta found by using a different model of spending — experimentation is a big no-no for nonprofits.

“Nonprofits are reluctant to attempt any brave, daring new fundraising endeavors, because they’re scared their reputations will be dragged through the mud,” he says.

This fear kills innovation. And if nonprofits can’t try new things and grow — how can they possibly tackle problems of the size that our world has?

4. Time

On the same note, Pallotta points out that it took Amazon four years to turn a profit. While businesses are given time to build the infrastructure they need, non-profits are not afforded this luxury.

“If a non-profit had a dream of building at a magnificent scale, but it would require six years for the money to go to the needy, we would expect a crucifixion,” says Pallotta.

5. Profit to attract risk capital

This point is a simple one: nonprofits can’t go after capital, because they can’t be on the stock market. And how do you build scale without capital?

Pallotta stresses that the nonprofit sector is at an extreme disadvantage when compared with the for-profit sector. The difference is dramatic. Since 1970, 144 nonprofits have crossed the $50 million annual revenue barrier. In the same amount of the time, an astounding 46,136 for-profit businesses have surpassed that mark.

So how did this happen? Pallotta looks to American history for the answer. He shares how the Puritanical spirit saw self-interest as a ticket to hell. But charity was seen as the antidote, a way to do penance. “Financial interest was exiled from the realm of charity,” he says.

Today, Pallotta is horrified that only one question is used to evaluate a charity: What percentage of my donation goes to the cause versus overhead?

“It makes us think that overhead is a negative, that it is somehow not a part of ‘the cause,'” he says. “This forces organizations to forego what they need for growth.”

Pallotta shares how his organization used a more-business like model — taking $50K in initial funding for AIDS Rides and multiplying it to $108 million, and taking an $350K initial investment in Breast Cancer 3-Day walks and multiplying it to $194 million. Pallotta says that his organization could have gone the route of just giving the initial funding to research, but by investing in growth, they were able to give so much more.

“[And yet] 350 employees lost their jobs because they were labeled overhead,” says Palotta. “This is what happens when we confuse morality with frugality.”

Pallotta notes that charitable giving in the United States has remained stuck at 2% of the gross domestic product for the past four decades. What if, instead of requiring charities to tighten their belts, we let them grow and try to increase their marketshare?

Pallotta shows an interesting pie graph. Two percent of the US GDP equals $300 billion, with about $60 billion going to health and human services charities. But what if charitable giving could be boosted just 1%? That would be an extra $150 billion a year — just for health and human services charities.

“Our generation does not want its epithet to read, ‘We kept charity overhead low,'” concludes Pallotta. “We want it to read that we changed the world.”

And so next time you’re investigating at charity, he pleads: “Don’t ask about the size of their overhead — ask about the size of their dreams.”